Draghi says ECB is ready to start buying government bonds

“Today we are ready with our OMT,” Draghi said. The conditionality for a bailout “doesn’t necessarily have to be punitive” and “that’s up to the Spanish government and the other euro-area governments to decide,” he said.

Draghi also praised Spain for making “significant progress” in addressing its banking crisis.

Earlier, Spain sold 3.99 billion euros ($5.2 billion) of two-, three- and five-year securities today. Spain sold three- year notes at an average yield of 3.956 percent, up from 3.845 percent at the previous sale on Sept. 20.

On Greece, Draghi rejected the suggestion that the ECB would participate in any further restructuring of Greek government bonds.

“We have said several times that any restructuring of our holdings would qualify as monetary financing,” he said.

While the ECB waits on Spain, the euro-area economy is deteriorating. Manufacturing contracted for a 14th straight month in September and consumer confidence also declined.

The ECB last month forecast a deeper economic contraction for 2012 than it did three months earlier, saying gross domestic product will drop 0.4 percent instead of 0.1 percent.

According to a Bloomberg survey, a majority of economists forecast the ECB will cut its benchmark rate in December.